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What Investors Can Expect from Microsoft's Q2 Earnings & Beyond

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Microsoft (MSFT - Free Report) shares have surged 55% over the last year to outpace the likes of Facebook (FB - Free Report) and Amazon (AMZN - Free Report) . This climb is part of a much longer run from the historic tech powerhouse, as it expands its cloud computing business.

Microsoft is one of only three public companies in the U.S. that currently holds a market cap of $1 trillion or higher. MSFT rests alongside Apple (AAPL - Free Report) and newcomer Alphabet (GOOGL - Free Report) . Investors have rewarded Microsoft for its ability to compete against Amazon in the cloud space.

Last quarter, the company’s Intelligent Cloud revenue surged 27%, driven by 59% expansion in the key Azure division. The Redmond, Washington-based firm’s other businesses, from Office and Windows to gaming and devices have also evolved and expanded.

Looking ahead, our current Zacks estimates call for Microsoft’s adjusted Q2 fiscal 2020 earnings to climb 20% on 9.9% higher sales that would see it reach $35.69 billion. Microsoft has a strong history of quarterly earnings beats. This includes topping our bottom-line estimates by an average of 9.6% over the trailing four periods.

Microsoft is currently a Zacks Rank #3 (Hold) heading into its Q2 earnings release on Wednesday, January 29. MSFT stock hovers right near its 52-week highs and its valuation picture has become stretched, alongside the S&P 500 as a whole.

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